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The offtake of imported wheat from ports in south India has picked up due to good demand from millers and Stuckists in the region. Traders in south India imported wheat is cheaper than that ordered from northern part of the country. South Indian buyers do not expect prices to fall and are resorting to the imported grain. At present, there is nearly 1.3 million tonne wheat stocked at ports and it is likely to be sold in the next two-to-three months. In south India, imported wheat is available at low cost as compare to domestic wheat costs.

Prices of wheat rose in the benchmark market of Indore, Madhya Pradesh, as arrivals fell due to government procurement in the state. In Indore, arrivals had peaked around 20,000 bags (1bag=100kg). Arrivals fell sharply to 5,000 bags. The grain was sold up 20-30 rupees from previous close. The government has procured 3.6 million tonne of wheat in Madhya Pradesh since the beginning of April, up nearly 15% on year. The most active May contract of wheat on the NCDEX ended down 0.9% from the previous close.

Delhi wheat down on low demand from coastal states. Mill-quality wheat was sold down 20 rupees in Delhi from previous close. Coastal states of Maharashtra, West Bengal, and south Indian states have already imported wheat for their stocks lower than the prevalent prices in north India. This has led to lower demand from these states. Arrivals in Delhi were around 35,000 bags (1bag=100kg). Prices have fallen as demand for wheat from Mumbai, West Bengal, and southern states is weak as there is a lot of imported wheat stocked at ports. India wheat imports in 2016-17 (Apr-Mar) are estimated at a record high 5.5 million tonne of the total imported wheat, nearly 2 million tonne is still unsold.

The government today said it has procured 16.5 million tonne wheat since the start of the fiscal year this month, up 12.8% from a year ago. The procurement was the highest in Punjab, where the government has purchased 6.4 million tonne wheat so far, up 12% from the year-ago period. In Haryana, another major producer of wheat, the government has bought 5.7 million tonne of the grain, up 5.6% from a year ago. The government has purchased 3.6 million tonne wheat in Madhya Pradesh, up nearly 15% on year, while in Uttar Pradesh, it has bought 321,105 tonne so far, sharply higher than 105,246 tonne in the year-ago period. The Uttar Pradesh government has set a target to procure 8 million tonne wheat this year, much above the central government’s 3-mln-tn target for the state. The central government has set a target to procure 33.0 million tonne of wheat for the current marketing season, up from 22.9 million tonne a year ago.

Exports of wheat from Australia in 2017-18 (Oct-Sep) are likely to fall by 18.2% on year to 18 million tonne due to transportation problems. Strong exports of pulses and canola due to higher demand for these commodities may lead to a hassle in transportation facilities and is likely to hit wheat exports. The port and logistical problems due to a shortfall in shipping containers may hamper wheat exports. Australia caters to a significant part of India wheat imports. India is also expected to import lesser wheat this year due to a bumper crop at home.